Hayden wants fewer CIA contractors

The CIA has begun a major initiative to better manage its contractor employees, largely by reducing its dependence on contractors. Contractors make up one-third of the agency’s workforce. The agency hopes to reduce the number of contractors by 10 percent by the end of fiscal 2008 with more efficient management, said Gen. Michael Hayden, the CIA’s director.

Agency officials said they are optimistic that goal can be met, and they are introducing some significant changes to achieve it. One such modification, CIA spokesman George Little said, will be a greater reliance on performance-based contracts, which require contractors to produce specific results within a given period.

“In the past, we have often relied on level-of-effort contracts, which ask companies to provide a set number of people for a certain period of time,” Little said. “The key difference is that performance-based contracts create incentives to achieve optimal results using as few people as possible.”

Stan Soloway, president of the Professional Services Council, said the CIA would need to make fundamental changes before it reduces its dependence on contractors. Soloway said success in achieving greater workforce efficiencies requires more than just a different type of contract. As part of the process, the agency must critically re-examine its operating methods to identify potential improvements.

“You have to be willing to step away from the way you are doing business now,” Soloway said.

As part of Hayden’s workforce realignment initiative, the agency announced that employees who resign before they are eligible for retirement must wait 18 months before returning to work for the CIA as a contractor. Thus if a company making a bid on a contract is relying on a former CIA employee who worked at the agency in the last 18 months, and the employee did not leave because of retirement, then the bidding company is not allowed to include that person’s experience in their proposal.

“We know who’s worked for us,” Little said. “It would be pretty clear, I think.”

The purpose of the measure, which became effective this month, is “to prevent CIA from becoming what I call a farm team for contractors,” Hayden said in a recent statement.

That new provision is in line with other revolving-door provisions that agencies, such as the Defense Department, now follow, said Trey Hodgkins, senior director of defense programs at the Information Technology Association of America.

The CIA’s contractor workforce initiative emerged from a report by a study group formed in December 2006 to review the agency’s use of contractors. Security needs after the 2001 terrorist attacks led to a sharp increase in the CIA’s contractor workforce. Five years later, CIA leaders decided to assess the agency’s growing use of contractors.

“Our contractor workforce…grew out of staff hiring freezes in the 1990s and a greatly expanded ops tempo after 9/11,” Hayden said. “We must now begin to address these inefficiencies.”

Within the next 30 days, the CIA’s Office of Human Resources will report to agency leaders with recommendations on which jobs federal employees should perform and which ones contractors could fill.“The recommendations will create a more efficient balance of staff and contractors and put the hard work and know-how of both groups to better use,” Hayden said.

Other steps in the initiative will begin soon, Little said, including ones aimed at combining user support and infrastructure requirements to make contracting more efficient. As part of those efforts, some IT contracts might also be consolidated, Little said.

The CIA plans additional steps, such as in-depth reviews to make contractors more accountable and measures that encourage contractors to become federal employees in some cases.

Tarallo is a freelance writer in Washington.

Reactions to the CIA’s contractor weight-loss planAsked about the CIA’s initiative to reduce its dependence on contractors, several leaders said they were intrigued by the concept. Kevin Mahoney, an associate director of the Human Capital Leadership Division at the Office of Personnel Management, said the initiative is consistent with the President’s Management Agenda, which urges federal agencies to use contractors to provide more government services more efficiently.

“They’re following that line of thought,” Mahoney said.

The Information Technology Association of America favors the initiative. “It’s a great effort to try to undertake,” said Trey Hodgkins, senior director for defense programs.

National Treasury Employees Union President Colleen Kelley said her group, which opposes the growth of federal contractor employees, said the CIA’s move speaks volumes.

“It is abundantly clear that Americans expect the work of their federal government to be performed by federal employees dedicated to serving the public,” Kelley said, “not by profit-driven companies.” — Mark Tarallo